Royal Bank of Scotland has called off plans to sell the Australian and New Zealand businesses it acquired as part of last year's landmark ABN Amro takeover after the last bidder walked away yesterday.
RBS said in a statement it "will retain ownership of these highly successful businesses and move to integrating them with our existing franchise in Australia and New Zealand". Shares in the group fell 6.4 per cent to 229.75p.
This followed news that the Commonwealth Bank had withdrawn from discussions to buy ABN Amro Australia Holdings, citing fears of carrying out a deal in the wake of the credit crunch. Analysts had valued the assets, which comprise investment banking and broking operations, at about A$1bn (£465m).
The Australian bank pulled its bid after its board had "assessed the current economic climate, the uncertainty in world financial markets and the risk involved in integrating these complex businesses at this time".
It is understood that Commonwealth wanted to announce its final decision over the deal before its results yesterday. The group first announced it was in discussions on 23 July, saying it had entered exclusivity with RBS and was going through the books.
RBS called in Lazard to review the division earlier this year and put the divisions on the block in July. Following interest from several institutions, National Australia Bank announced its interest the same month. It withdrew shortly after.
This comes as a blow to the bank as it looks to bolster its balance sheet in the wake of the sub-prime meltdown and its acquisition, alongside Santander and Fortis, of ABN for €71bn (£56.6bn).
Earlier this year, RBS raised £12bn from a rights issue and announced it would welcome bids for its insurance arm. The group is hoping to announce the result of this auction at the end of the summer.Reuse content